A mortgage Loan Officer, also known as a Loan Advisor here at Tomo Mortgage, is the person you’ll likely work with the most when you’re looking for a home loan. They’re licensed professionals who explain your loan options, guide you through the process, and crunch the numbers to get you the best deal possible.
What does a Loan Officer do?
Your loan officer is your main contact for understanding loan products, interest rates, and selecting the right loan for your needs. They help you navigate the early stages of the application and work to get you the best possible deal.
You’ll meet your loan officer right at the beginning when you’re exploring your loan options and before you apply. Often, they’ll run financial scenarios to help you understand which loan product will save you the most money in the long run. Just bear in mind that they make money selling you loan products from their specific lender, so it’s important to trust who you’re working with and have all the info you need.
When should I contact a loan officer during the home buying process?
You should reach out to a loan officer right at the start of your home buying journey. Before you even start house hunting, when you reach out to a mortgage company or fill out their online application, you’ll be put in touch with a Loan Officer or Loan Advisor to get pre approved. This way, you know your budget and can move fast when you find your dream home.
What questions should I ask a loan officer before working with them?
- What loan product do you think would be best for me in my situation (e.g., a 15- or 30-year fixed rate? An ARM, etc.)? Even if you already know what you’d like to do, it’s important to see how thoughtful they are about why you should choose one product over another—do they take the time to explain all your options, and save you the most money?
- Can you provide a detailed breakdown of your fees? See how clear they’ll be about the fees that they have discretion over—like lender fees, origination fees, and processing fees. If they dance around the issue of fees, it’s a big red flag.
- What’s your company’s on-time close rate? This is something every lender tracks—and very few communicate, since the industry average is about 40%. If you hear things like “Oh, I always close on time,” that can be a big red flag since the Loan Officer usually has little control over the closing timeline (that’s dependent on the underwriter, processors, and closers). Tomo’s on-time close rate is 98%, in case you’re curious.
- What can I do to save the most money? There’s hundreds of different variables that go into a mortgage interest rate—there’s no single answer “for me.” You might want to use some of the down payment to buy down the interest rate, for example. Or you might want to pay off some of your existing debt to get a lower rate. See how thoroughly they do the math and give you an honest answer about the best move in your unique situation. No two loans are alike, but if you feel like you’re a small cog in a big machine, chances are you’ll over-pay.
What documents do I need to provide to a loan officer?
Be ready to provide:
- Proof of income (pay stubs, tax returns)
- Bank statements
- Credit report
- Employment verification
- Details of any debts and assets
How does a loan officer determine the best mortgage option for me?
A loan officer assesses your financial situation—income, credit score, debts, and down payment—then matches you with loan products that fit your needs. They’ll analyze your budget, goals, and preferences to recommend the most suitable mortgage option.
What fees should I expect to pay a loan officer?
Typically, a loan officer’s compensation is built into the loan itself. However, be aware of potential fees like application fees, origination fees, and points. Always ask upfront for a breakdown of any costs so you’re not caught off guard. (Our Loan Advisors here at Tomo Mortgage will never charge you any fees unless you choose to buy points or lender credits).
How does a loan officer’s role differ from a mortgage broker?
Loan officer: Works for a specific lender and helps you secure a loan from that lender only. They’re focused on offering the products and rates of their own institution.
Mortgage broker: Shops around with multiple lenders to find the best deal for you. They offer a range of options and act as an intermediary between you and various lenders. But, often, the broker is going to sell you an inflated interest rate (since they need to cover their own costs, too) and they might be biased in who they offer rates from when they “shop around.” Various websites like NerdWallet and LendingTree allow you to compare rates from different lenders without a broker in between.
Loan officer vs. loan processor: What’s the difference?
Loan officer: Helps you kick start the process, choose a lender, and pick the best loan product. They’re the face you see at the beginning.
Loan processor: Once your application is in, the loan processor takes over. They handle all the behind-the-scenes work, from verifying financial info to gathering documents and prepping your file for underwriting. They handle the nitty-gritty while you wait for final approval.
Why do many people not trust Loan Officers?
- Complex terms: Mortgage jargon can be confusing, making it hard to trust explanations that aren’t clear.
- High-pressure tactics: Aggressive sales tactics can make you feel pressured and unsure about the loan.
- Hidden costs: Lack of transparency about fees and terms can lead to distrust.
How to choose the right loan officer
- Research and compare: Don’t just go with the first person your agent or best friend recommends—usually, you’ll want to get rates from multiple lenders, and pick the lowest one. Who you work with is important, but only if they’re able to get you the best pricing in the first place. (9/10 people can save money from Tomo Mortgage, by the way—see today’s rates)
- Seek clear answers: Ensure your loan officer explains terms, rates, and fees clearly.
- Get everything in writing: Document all promises and details to avoid surprises.
- Request a loan estimate: This helps you compare costs easily.
- Watch for pressure: Avoid loan officers who rush you into a decision.
- Verify licensing: Ensure the loan officer is properly licensed and regulated.
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.
